1. Field of the Invention
This invention relates to the field of electronic bill aggregation, presentment and payment.
2. Description of the Related Art
Current methods and systems for electronic bill presentment and payment, such as credit cards and paper checks do not adequately meet the needs of buyers and sellers. New methods and systems for bill aggregation, presentment and payment are needed, irrespective of whether the underlying transactions occurred in person, over the telephone or via the Internet. Any new methods and systems that would replace or supplement existing bill presentment and payment methods and system must be designed with security as a prime consideration and the institution that implements such methods and systems must be trustworthy.
On the buyer side of the transactions, one of the prime concerns is to minimize transaction costs. Building in cost of credit to the payment transaction where it is not needed merely adds to the price the buyer must pay. Moreover, the buyer typically does not wish to pay the seller before the goods have been received and inspected. Many transactions may be characterized as one-time purchases, such as when the buyer buys a book from an online retailer. Others purchases are recurrent and periodic in nature. Examples of such recurrent and periodic purchases include charges for electric power, telephone service, a mortgage, or other transactions for which payment is delayed. All of these purchases for which vendors send periodic bills or invoices to consumers result in heavy and low profit margin postal traffic, as bills are sent to buyers and payment (usually in check form) is sent to sellers, usually via first class mail.
On the seller side of such transactions, sellers want quick and certain payment, and often offer discounts for quick payment. The cost of credit is often high for sellers and, if sellers factor accounts receivable, the cost of credit may come close to or exceed their profit margin. Late or defaulted payments by buyers make it difficult for the seller to meet its fixed expenses (such as payroll, for example), which must be met on a timely basis. Other expenses of seller include the cost of preparing and mailing printed bills. The buyer also incurs the cost of sending payments in response to the vendors' bills and invoices. Late or defaulted payments, therefore, can threaten the very existence of smaller companies. Sellers of all sizes go to great lengths, therefore, to establish the creditworthiness of their customers. From the seller's point of view, transactions for which the buyers are slow in paying become (unwanted) credit transactions by their very nature. Concerns for creditworthiness inevitably clog the payment system and slow down the business-to-business (B2B) process.
Well-founded concerns regarding security issues related to buying and selling over the Internet must be met if electronic commerce is to reach its potential. Concerns over privacy and the safeguarding of individual and business information must also be addressed, or the government may ultimately step in and mandate regulation. In addition, business users require convenience and transparency in the operation of security features. Indeed, both security and ease of use are firm requirements for payment service user satisfaction.
Consumer electronic commerce, based on Web stores, seems far removed from business to business-electronic commerce and supplier auction of commodities and services. Yet, both rely on timely payments and neither is content with a system that is electronic on the seller side and a slow, wasteful paper-based process sending buyer payments or an inadequate and costly credit card process.
The buyer now using credit cards for Internet payment must usually log in separately for each Web site at which the buyer wishes buy goods or services. Actually buying something with an online vendor usually entails filling out a form for each Web site and providing a great deal of business and/or personal information. In effect, the buyer must fill out a credit application for each seller, irrespective of whether the buyer actually wishes to establish a credit relationship with the vendor or not. Payment by credit card is usually authenticated by the information provided by the buyer and often includes additional security measures, such as digital certificates. Buyers may or may not need to charge. However, the current payment paradigm on the Web effectively forces buyers to use credit or to stay off the Web. If a business has low profit margins, the charges for credit or purchasing cards may force the cost of payment to exceed the profit. Such businesses cannot tolerate such charges, particularly in the face of current trends including auctions and electronic purchasing that operate to further drive down profit margins for suppliers.
What are needed, therefore, are methods and systems to enable sellers to reduce the high transaction costs associated with billing and the consequent extension of credit to buyers. What are needed are methods and systems to enable vendor bills to be aggregated, presented to the buyers and paid by the buyers in a secure, convenient and low cost manner.